Global current account imbalances were a major subject of concern in the years before the recent financial crisis. It is shown that the expected (negative) equilibrium relationship between net foreign assets and the trade balance that had held in the previous twenty years appeared to break down...

Theory suggests a significant positive relationship in long-run equilibrium between net foreign assets (NFA) as a proportion of GDP and real exchange rates. Empirical tests have ignored two issues: the large variation in cross-country trade/GDP ratios, which is likely to induce substantial...

This paper incorporates international capital flows into a two-country, monetary-general-equilibrium model of asset prices with investment and production. We use the model to calculate theoretical covariances between investment, the current account, the exchange rate, and the terms of...

This paper incorporates international capital flows into a two-country, monetary-general-equilibrium model of asset prices with investment and production. We use the model to calculate theoretical covariances between investment, the current account, the exchange rate, and the terms of...

The paper investigates the impact of exchange rate depreciation on the balance of payments (BOP) in Nigeria over the period 1961 - 2012. The analysis is based on a multivariate vector error correction framework. A long-term equilibrium relationship was found between BOP, exchange rate and other...